Quantitative analysis of rate-driven and due date-driven construction: production efficiency, supervision, and controllability in residential projects

Concerns about production efficiency, quality, and affordability in the residential construction indicate there may be benefits in adopting alternative production control strategies to those traditionally used. Reducing adverse effects of exogenous variability in demand and endogenous variability in process are the ultimate goals of production control strategies. For residential construction this means controlling the number of houses under construction and controlling the start rate of new house constructions. The aim of this investigation is to compare and contrast the outcomes of these two production management strategies. Production data of two volume house builders in Victoria and Queensland, Australia, were collected. Tangible performance metrics from the builders were analyzed and compared using the principles of queuing theory. Then numerous simulation experiments were designed and run to analyze different what-if scenarios in the building environment. A special purpose simulation template was developed to define a cap for production and limit the number of houses under construction based on actual demand and available capacity. The findings reveal that rate-driven construction outperforms due date-driven construction in terms of three studied performance measures. This investigation adopts an original and quantitative approach towards three production aspects of efficiency, supervision and controllability. Therefore it contributes to the body of knowledge by developing an in-depth insight into superior performance of the rate-driven control strategy with the intention of improving production output and long term sustainability of residential and other subsectors of the construction industry.